Trump says he plans crackdown on defense firms over executive pay and stock buybacks | Business
Donald Trump has claimed he plans to crack down on executive compensation and shareholder payouts for military defense contractors as his administration increases spending on the armed forces.
In a post on social media, the US president said defense giants were failing to quickly deliver “vital” equipment to the US military and its allies around the world.
Trump said companies were paying “exorbitant” salaries to their top executives and large dividends to shareholders, while equipment was “NOT MADE FAST ENOUGH.”
He said he would “not allow” defense companies to pay dividends and share buybacks or pay executives more than $5 million until they accelerated deliveries and began building new, modern production facilities.
Trump’s intervention came just days after US forces struck Venezuela and captured its president, Nicolás Maduro. The Trump administration also said it was examining “a range of options” for seizing Greenland and noted that using the U.S. military to do so was “always an option.”
On Truth Social, Trump wrote: “To all United Government Defense Contractors and the Defense Industry as a whole, ATTENTION: While we produce the best Military Equipment in the world (No other Country comes even close!), Defense Contractors are currently distributing huge Dividends to their Shareholders and engaging in massive Stock Buybacks at the expense and detriment of investment in Facilities and Equipment. This will no longer be allowed and will not be tolerated!”
“Executive Pay Packages in the Defense Industry are exorbitant and unfair given how slowly these Companies deliver vital Equipment to our Military and Allies,” he added. “Salaries, Stock Options and any other Compensation are too high for these Executives.”
In fiscal 2024, Lockheed Martin’s CEOs and General Dynamic accepted More than $23.7 million RTX CEO received total compensation each more than $18 millionand Northrop Grumman CEO received over $24.3 million.
General Dynamics declined to comment. Lockheed Martin, RTX and Northrop Grumman did not immediately respond to requests for comment.
Trump has increased military defense spending to nearly $1 trillion annually and signed a record $901 billion bill last month.
Without offering a legislative plan, Trump said, “I will not allow Dividends or Stock Buybacks for Defense Companies until these problems are corrected – Likewise for Salaries and Executive Compensation.” “MILITARY EQUIPMENT IS NOT BEING BUILD FAST ENOUGH! Instead of borrowing from Financial Institutions or taking money from your Government, it must be built now with Dividends, Stock Buybacks and Excess Compensation of Executives.”
